Irving Gould was a Canadian financier and chairman of Commodore International. Although it’s an oversimplification, journalist Robert X. Cringely dismissed the once high-flying computer company, which had 60% of the market in 1984, as Irving Gould’s stock scam.

This image shows former Commodore chairman Irving Gould in 1991, at the age of 72.

Gould never sought the spotlight, but with Commodore, the spotlight found him. Gould had other financial interests, including a shipping company called Interpool. He sold Interpool in 1978 and made $25 million. Michael S. Tomczyk, a former Commodore employee who wrote a book about Commodore in 1984, estimated Gould’s personal wealth at that time at $100-$250 million.

Information about the enigmatic Gould was always difficult to find. As old news content becomes computerized, it becomes possible to piece together some details. Writing in New York magazine’s May 13, 1985 issue, Dan Dorfman noted Gould was readily accessible to the press when Commodore was doing well, then disappeared from view when the company struggled. Dorfman estimated that Commodore’s woes decreased the paper value of Gould’s share of Commodore by $300 million.

Gould owned about 17.9 percent of Commodore’s outstanding stock. Its peak value was about $35 per share, so his Commodore holdings may have been worth nearly $400 million at one time, but Commodore’s share price was volatile even during its best years. That helps explain the wide range of Tomczyk’s estimate.

It’s likely we’ll always know more about the engineers who worked for Gould than we will about Gould himself.

What was Irving Gould hiding?

Gould saved Commodore in 1966 and at various points afterward, including 1975 when he sunk $3 million into the company. He is also credited with running the company into the ground. In its final 18 months, Commodore lost $374 million. Among their final purchases was an insurance policy at the price of $2.6 million to protect the personal assets of Gould, Mehdi Ali, and the members of the board of directors.

Toward the end, Gould paid himself well. In 1988, his compensation was $500,000. In 1989, it increased to $1.25 million, and in 1990, it increased again to $1.75 million. Commodore’s profit for the entire year of was $1.5 million. So he made more than his company did in 1990. For comparison, Gould’s counterpart at IBM made $713,000 in 1990, a year that IBM pulled in a profit of $6 billion.

Irving Gould’s tax scam

To avoid paying taxes in the United States and Canada, Gould divided the time he spent living and working between Canada, the United States, and the Bahamas. Commodore had a private jet, which at various times it owned or leased from Scientific Packaging, another one of Gould’s companies, to accommodate his travels.

This seems in character, as Irving Gould was not the most honest of men. In 1960, he had pleaded guilty to perjury that covered up his brother’s defrauding Cabanga Investments Ltd of $456,000. Irving Gould, then 40, received a suspended sentence. His older brother, Albert, received a sentence of six years.

Financing Gould’s tax evasion and lavish lifestyle was a luxury Commodore could ill afford. The plane cost $2,150 an hour for Commodore to fly. Meanwhile, Commodore’s rival Atari, run by his former business partner Jack Tramiel, kept itself afloat in 1985 by selling its surplus office furniture. Every dollar counted in those days, and Commodore burned a lot of them.

How Irving Gould became involved with Commodore

Irving Gould entered the picture at Commodore in 1966 following a complex financial scandal involving Atlantic Acceptance Corporation. Atlantic Acceptance was the sixth largest financial lender in Canada at the time, with assets totaling approximately $150 million. It wasn’t a bank and wasn’t subject to the same regulations. That allowed it to grow from $1.2 million in assets in 1954 to $150 million in just 11 years. Its downfall rocked the Canadian financial world and resulted in an investigation that lasted four years.

Commodore and Atlantic Acceptance Corporation

Commodore first borrowed money from Atlantic Acceptance Corporation in 1958. The first loan helped Commodore finance a venture to import portable typewriters manufactured in Czechoslovakia.

Soon, three members of Atlantic Acceptance Corporation’s board were sitting on Commodore’s board. Atlantic Acceptance loaned Commodore more money, and Commodore took some roundabout ways to pay some of it back. Sometimes it wasn’t clear whether Commodore had actually paid its debt.

Meanwhile, the members of the boards of both companies were buying Commodore stock cheaply.

Willson Stationers & Envelopes, Ltd.

In April 1965, Commodore reached an agreement to purchase Willson Stationers & Envelopes, Ltd., the largest retailer of stationery and office supplies in Canada, for $3 million, financed by Atlantic Acceptance. On June 14, 1965, Atlantic Acceptance bounced a check for $5 million. Within two days, it was in default of all $100 million of its outstanding debt. So began the biggest stock collapse in Canadian history at the time. Atlantic Acceptance’s failure took numerous companies with it, and it looked like Commodore could be one of them.

Commodore secured funding from a different source. But the terms weren’t good. It was a six month loan at 11 percent interest, and it got worse. Commodore put up a German typewriter manufacturer it owned as collateral. If Commodore didn’t repay the loan, it wouldn’t have typewriters to sell.

Commodore had six months to figure out what it was going to do. A month or so later, in July or August 1965, Tramiel met Irving Gould. One of Gould’s companies helped Commodore sell Willson Stationers & Envelopes to a company in Idaho, albeit at a loss. By November of 1965, Commodore still owed Gould’s companies more than $300,000. Gould ended up investing $500,000 and becoming Chairman of the Board. He kept Jack Tramiel. But the diminished Tramiel was always second in charge.

It’s important to note that getting caught up in the Atlantic Acceptance scandal was Tramiel’s doing, not Irving Gould’s. Tramiel’s testimony suggested not everything he did was above board, but he wasn’t indicted.

Adding machines and calculators

It was Gould’s idea to have Commodore manufacture adding machines. As that market declined, Tramiel came up with the idea to manufacture calculators. Gould said the calculators were the easiest money Commodore ever made. Unfortunately for Gould, Texas Instruments, Commodore’s main supplier of chips, noticed the same thing. In 1973, TI started making its own calculators. Commodore couldn’t compete on price.

Commodore solved the problem by buying chips from MOS Technology. MOS had no interest in calculators. But Tramiel envied TI’s vertical integration. Eventually MOS’ fortunes fell to the point where Commodore could buy the whole company, allowing Commodore to duplicate TI’s vertical integration. Gould kicked in $3 million to help the purchase.

MOS brought with it a new opportunity.

Commodore and computers

MOS also made the 6502 CPU, used in, among other things, the first Apple computer. This led to Commodore making computers as well, starting with the Commodore PET.

The VIC-20, priced at $299, was the first computer to sell more than a million units.

Commodore was an also-ran in the market until the VIC-20 and its hugely successful follow-on, the Commodore 64. Thanks to those two machines, Commodore went from selling thousands of computers a year to millions.

But once Commodore was successful, Gould wouldn’t issue stock to grow the company. Instead, Commodore relied on its profits and loans from Gould or other companies Gould controlled to run. Eventually this led to Tramiel leaving the company in 1984.

Admittedly, Tramiel used a debt-heavy model to run Commodore for years. But when Commodore was ready to mature into a new phase of its financial life, Gould wouldn’t get on board.

The problem of replacing Jack Tramiel

Gould replaced Tramiel with a revolving door of executives he poached from other companies, or knew from his other business interests. Only Mehdi Ali lasted more than 2-3 years. Commodore’s market share steadily dropped as the C-64 aged and Commodore failed to replicate its success.

Gould’s problem was that he chased the easy money, even when the conditions that created the easy money changed. Commodore duplicated TI’s business model, but then calculators became cheap commodities. And if the conditions existed in the late 1980s to replicate the 64’s success, Commodore no longer had the means.

Admittedly some of these problems were beyond Gould’s control. Getting into calculators wasn’t his idea. Neither was getting into computers. Commodore lost key engineers due to disagreements with managers other than Irving Gould. Their loss made it harder to follow up on the company’s successes. But the buck stops at the top. Gould couldn’t have been unaware of these problems. And he didn’t fix them.

Commodore’s market share declined steadily from 1984 to 1994. In 1993, its final full year, its market share was less than 5 percent. Commodore’s financial history tells the sad story in another way.

Gould disappeared from the news after Commodore liquidated. He had other business interests, but none had Commodore’s high profile. Gould lived out the rest of his life in relative obscurity. But it was lavish obscurity, and he probably wanted it that way.

Irving Gould’s personal fortune

This 1988 book featured Irving Gould’s collection of Netsuke Japanese sculpture

So what, exactly, did Gould do with the millions that he plundered from Commodore and didn’t pay taxes on? Tomczyk mentioned he collected art. Oriental art, in particular.

What kind of art? Miniature sculptures from Japan called Netsuke, for one. Netsuke were carved sculptures, produced from about 1615 to around 1868, that served as fasteners to attach a pouch or case to kimono sashes since traditional Japanese clothing lacked pockets.

Tomczyk’s clue leads to some rare insight into Gould. Or at least how he spent his time.

Irving Gould and Netsuke

It turns out Gould’s collection of Netsuke Japanese miniatures, or 212 pieces from it at least, were exhibited from February 20, 1988 to October 23, 1988, at the Royal Ontario Museum in Toronto. And the museum published a catalog that remains available on the secondhand market.

If you collect vintage computers and are looking for a piece of offbeat Commodore memorabilia, that book is hard to beat. There can’t be many people who’ve made that particular connection. And it seems appropriate to be able to see how Gould spent the money he made from controlling the company that sold millions of Commodore 64s. At the time, an unremarkable piece sold for $500, while pieces from noteworthy artists sold for thousands of dollars.

The earliest reference I could find to Gould’s Netsuke collection was in a book published in 1973. So it appears Gould long had some prominence among Netsuke collectors. Another news article from 1988 called Gould a “Canadian industrialist and business commuter to Japan for the past twenty years.” That implies he started collecting sometime in the 1960s.

Irving Gould died at Mount Sinai Hospital in Toronto in 2001. Some of Commodore’s creditors still had lawsuits pending against Gould’s estate years after his death.